Prepare Journal Entries to Record the Following Transactions Entered into by Valente

question 96

Essay

Prepare journal entries to record the following transactions entered into by Valente Company:
2017
June 1 Received a $10,000, 12%, 1-year note from Andrea Foley as full payment on her account.
Nov. 1 Sold merchandise on account to Patton, Inc. for $12,000, terms 2/10, n/30.
Nov. 5 Patton, Inc. returned merchandise worth $500.
Nov. 9 Received payment in full from Patton, Inc.
Dec. 31 Accrued interest on Foley's note.
2018
June 1 Andrea Foley honored her promissory note by sending the face amount plus interest. No interest has been accrued in 2018.

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Definitions:

Variable Costing

A management accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold.

Net Cash Flow

The amount of money being transferred in and out of a business, reflecting the company's operating, investing, and financing activities over a period.

Absorption Costing

A cost accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Division Managers' Salaries

Compensation paid to individuals overseeing distinct business units or divisions within a larger organization.